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Saving a few ‘Too Big To Fail’ Creates Millions “Too Small to Succeed”

We’ve heard since the financial crisis came to a head last September that it was essential to bailout the banks and the automakers because they ‘were too big to fail.’  We were assured that if we acted quickly and massively with financial aid, things would get back on track and the economic recession would be weakened and the economy would recover.

So the last days of the 110th Congress and Bush administration as well as the first days of the 111th Congress and Obama administration have been spent dealing massive amounts of our tax money at these issues.  When President Obama took over, the tone changed from a matter of urgency to one of ‘catastrophe’ and the bailing continued unabated. We’ve spent or obligated future funds into the Trillions of dollars, and we don’t seem to be making any progress.  The presence of money seems to have opened up a financial black hole, sucking up our economy with a quickening pace.

What has all of this done to the rest of us?  At last look, I think something more than 55% of all workers had some sort of privately held wealth in IRAs, 401k or 403(b) accounts.  All of those individuals were working hard, paying taxes and investing what they could to provide for themselves and they were doing pretty well.  Given my own experience, I was on track to being able to handle the future on my own terms, instead of surrendering total control to the Social Security administration in return for a relatively small, fixed income.  Since the financial market decline, that goal may be in jeopardy. If this decline continues without the historical trend to rebound in the months following a bear market, millions of us may have our plans altered and have to accept less than we worked to attain.  In a word, we will have failed to attain our goals, but apparently we’re too small to matter.

Trillions of dollars of wealth have been consumed by falling market prices–and those trillions were the best answer to the looming crisis for the Social Security fund.  With continued prosperity and real growth in the equities, individuals would have been able to care for themselves and delay seeking assistance from the government in order to retain greater control of their economic health.  Think about  it: if your IRA was able to provide 2 to 3 times your social security income, why would you opt for the lower amount with its restrictions on your ability to live as you desire?  I was actively trying to create the ability to delay the visit to the Social Security office for as long as possible so that I could maximize my freedom of choice.  I still intend to do so.  But the current spending binge and the inevitable increase in taxes and inflation to follow will cause that objective to be difficult, if not impossible to attain.  Why are we so committed to subjecting retirees to lives of financial mediocrity on limited fixed incomes?

With others of like mind, we could reduce the drag on the system and protect the economy for our children and grandchildren.  But now, this objective is going to be much more difficult to attain. We’re headed for a government based solution that will wreak havoc on the economy for decades, not months.  All because a group of individuals have obtained political power and governmental control to implement what they think is the best solution for us: one that decreases freedom, diminishes economic well being for all and causes greater interference in our lives than our Constitution or heritage would think necessary or proper.

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